Speaker of the House Nancy Pelosi, D-Calif., arrives for a gathering of the House Democratic Caucus at the Capitol in Washington, Tuesday, Sept. 10, 2019. A leaked draft proposal from Pelosi says Medicare should overhaul how it pays for prescription drugs, by negotiating prices for the costliest medications, curbing year-to-year price hikes, and limiting what seniors pay out of their own pockets. (AP Photo/J. Scott Applewhite)

Draft Pelosi plan would overhaul how Medicare pays for drugs

September 10, 2019 - 7:38 pm

The Associated Press

WASHINGTON (AP) — A draft plan from House Speaker Nancy Pelosi leaked Tuesday would overhaul how Medicare pays for prescription drugs, by negotiating prices for costly medications, curbing annual price hikes, and limiting what seniors pay out of their own pockets.

With President Donald Trump highly interested in a deal on prescription drugs, the ambitious plan appeared to be Pelosi laying down a marker that represents what House Democrats would want to see happen.

Pelosi's office wasn't commenting directly on the leaked proposal, but spokesman Henry Connelly said she's working with leading Democrats "to develop the boldest, toughest possible bill to lower prescription drug prices for all Americans." The plan would also make Medicare's negotiated prices available to people with private insurance.

The California Democrat has been in discussions with the White House for months about potential actions to curb drug costs, but the outlook remains uncertain. Empowering Medicare to negotiate prices is a nonstarter for most Republicans, even if Trump in the past backed the idea. In the Senate, a bipartisan group of lawmakers is advancing a bill that stops short of allowing Medicare to negotiate but incorporates other major ideas in Pelosi's plan.

The leaked draft "would please a majority of Democrats in the House, (but) it is clearly not designed to appeal to Republicans or to the Senate," said John Rother, president of the National Coalition on Health Care, an umbrella group that represents a broad cross-section of consumer and health care industry organizations. "This plan gives the Democrats a strong message platform going into the election year."

Pelosi plans to unveil a bill that Democrats can take to the House floor, but in an evolving situation, it's unclear how closely it will track with the leaked draft. Major provisions of the draft plan include:

— Authorizing Medicare to negotiate prices for the 250 costliest drugs. That includes pharmacy drugs under the popular "Part D" prescription benefit, along with "Part B" medications dispensed in doctors' offices. The maximum price would be determined using a blend of international prices, an idea similar to what the Trump administration has proposed for drugs administered in doctors' offices. Insulin prices would be subject to negotiations. Drug companies that balk at making a deal would face steep fines.

— Requiring drugmakers to pay rebates to Medicare if they hike their prices beyond increases in inflation. Pelosi's inflation rebates resemble a bipartisan idea from Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore. Their bill has already cleared a key Senate committee, but a date for floor consideration has not been set. It has Trump's support.

— Limiting what seniors pay out of pocket for their medications each year. Currently there is no limit on drug copays, and the advent of drugs costing hundreds of thousands of dollars a year has left some seniors saddled with bills that rival a mortgage payment. An out-of-pocket limit is also part of the Grassley-Wyden bill, and the idea has support from the Trump administration.